The EB-5 Finance program is intended to encourage the flow of foreign capital into the United States economy and to promote employment of United States workers. The program is multidimensional, implicating public finance, corporate finance, securities, tax and immigration laws. In exchange for a minimum investment of $1 million (or $500,000 using regional centers in a targeted employment area) in a commercial enterprise that will employ at least 10 full-time U.S. workers, the immigrant investor secures preferential, EB-5, status. Moneys invested by the immigrant investor can be used as a significant component of the capital stack for any public finance project meeting the requirements of the EB-5 program.
Kutak Rock serves as EB-5 securities, tax and corporate counsel to regional centers, private equity funds, developers, lenders, community development agencies and public agencies managing or otherwise involved with private equity offerings seeking EB-5 investments. The complex and evolving EB-5 legal environment places scrutiny upon, and poses significant risk for, EB-5 project stakeholders who are not only responsible for overseeing and managing the investment opportunity; but also complying with nuanced securities laws and regulations and tax implications. Kutak Rock’s proactive approach emphasizes collaboration with our clients to establish preventative measures to minimize the legal risk associated with their EB-5 projects.
Kutak Rock’s two-phase EB-5 representation strategy is to counsel our clients in framing and structuring the EB-5 investment opportunity, and to collaborate with immigration counsel and economists to engineer the EB-5 team’s approach for meeting our clients’ objectives in compliance with applicable law and best practices. Our extensive structured finance experience positions us to devise creative structures combining EB-5 financing with an array of other financing tools such as tax credits, bonds, traditional lending and private equity. We document and negotiate the key facets of the EB-5 transaction, including the preparation of private offering documents, operating agreements, partnership agreements, foreign placement consulting agreements, teaming agreements, construction loan documents and escrow agreements.
The EB-5 market is evolving and competitive. Our EB-5 team conducts extensive due diligence investigations to prevent costly mistakes and identify problems before they become obstacles. We act as a trusted advisor during every stage of the EB-5 project by utilizing the expertise of our real estate, corporate governance, finance, labor and employment, securities and tax teams to guide our clients through the labyrinth of EB-5 legal considerations.
